The Irish hotel market is continuing to perform strongly, according to the findings of the latest quarterly review of the sector by Sherry FitzGerald's new commercial partners, Cushman & Wakefield.

The report, which is due to be circulated to the firm's clients on Tuesday, shows that about €140m in hotel sales was transacted in the three-month period to the end of June, representing a 12pc increase on the previous quarter.

Indicating that the appetite of Irish investors is making a robust recovery, the review notes that domestic buyers acquired 20 of the 27 hotels sold in the first half of 2016, accounting for 68pc of the total spend.

But while the second three months of the year witnessed a 12pc uplift on the first quarter in terms of the combined value of the hotels sold, it did see a slowdown in the number of hotel sales.

The largest hotel transaction in the period was the four-star Stauntons on the Green in Dublin 2, which was sold to a US investor for €12m.

The Stauntons sale is noteworthy when one considers that its estimated price paid per room of €235,294 was nearly double the €118,514 per room paid in the case of the Tara Towers Hotel in Booterstown which sold in the first quarter for €13.1m.

In terms of hotel sales conducted in the second quarter, Stauntons' price paid per room was even more impressive, representing a multiple (3.5 times), of the €66,265 paid per room by Windward Management and Emerald Investment Partners in the €10m-€12m purchase of the Hilton Dublin airport hotel.

A key pattern this year, according to Cushman & Wakefield, is the increasing level of hotel investment outside of Dublin.

While activity in the capital accounted for 32pc of the total hotel spend up to the end of June, that figure relates to just five of the 27 hotels sold.

The largest hotel to change hands outside the capital in the last quarter was the four-star Pillo Hotel in Ashbourne, Co Meath, which went to an Irish investor for around €11.5m.

Other notable transactions for the period included the Dalata Group's acquisition of the four-star Clarion Hotel and Leisure Centre in Limerick for €8.5m and the Prem Group's purchase of the four-star Tulfarris House and Golf Resort in Co Wicklow for more than €8m.

Further analysis of the hotels sold shows that 14 of the 27, or 70.5pc have four-star ratings. Commenting on this, the report says: "Investors regard four-star as both highly profitable, and an asset which has a large refurbish/development opportunity, not only in Dublin, but across the country."

Cushman & Wakefield note that the sales of two of the country's most celebrated and valuable four-star hotels - the Gresham Hotel and the Doubletree Hilton (formerly the Burlington) - are both expected to close shortly. With the Gresham set to achieve upwards of €92m with its sale to the Spanish-owned Riu Hotels and Resorts and the former Burlington poised to secure €180m from the German-owned DekaBank for US private equity giant Blackstone, the value of hotel sales being reported for the next quarter is poised to grow significantly.

Quite apart from the €272m to come from the Gresham and Burlington transactions, a further €52m worth of hotels were sale agreed at the end of June while another €320m worth of hotels were on the market. Taking those figures, Cushman & Wakefield says that total transaction activity in the hotel market for 2016 is "likely to reach, if not exceed 2015 volumes".

Looking at the profile of those who invested in hotels in the first half of this year, the report notes a dramatic increase in the ratio of Irish versus international buyers. While 56pc of the total spend on hotels was accounted for by domestic investors in the first six months of 2015, that figure grew to 68pc for the equivalent period up to the end of June this year.

A breakdown of the international investors active in the Irish hotel market in the first half of 2016 shows UK buyers were involved in 51pc of deals, while investors from the United States, Europe and China accounted for 27pc, 17pc and 5pc respectively.

As the number of visitors to Ireland continues to rise, with annual growth of 11pc recorded in the second quarter, the report welcomes the re-emergence of development activity in the hotel sector. But its authors caution that the 665 rooms under construction in Dublin and the 222 rooms being built across the country at the end of June will be "insufficient to meet demand".

That assertion is underpinned by the fact that Dublin will see the opening of just one new hotel - the 198-bedroom Holiday Inn Express at Findlater House on O'Connell Street in 2016.

Its arrival will see the capital gain just 16 additional hotel rooms, owing to the closure and recent demolition of the 182-bedroom Clyde Court Hotel (formerly the Berkeley Court) in Dublin 4.